Petroleum minister says maintenance of refineries will cost N250 billion

The Federal Government plans to spend N250 billion on the Turn-Around Maintenance of the Port Harcourt, Warri and Kaduna refineries.

The Minister of Petroleum Resources, Diezani Aliso-Madueke

This was disclosed by the Minister of Petroleum Resources Diezani Alison-Madueke on Monday while being grilled by the Senate Committee on Petroleum Resources (Downstream) over the failure of the government to fix the refineries.

The minister said the beginning of the fourth quarter of 2014, the Turn-Around Maintenance project would have been completed, and the three refineries would be producing 370, 000 barrels per day, which is about 90 percent of the 445,000 barrels needed daily.

The project would start with the Port Harcourt refinery and Mrs Alison-Madueke said the government will spend $146 million out of which $32million (75 percent) had already been paid for the materials needed.

On why petroleum is selling at varying prices across the nation, the minister merely said: “Since the price was changes in January, it has become difficult for the market forces to stabilise at the official price. There is a major issue of supply partly due to subsidy payments. We are battling hard to ensure sufficient supply.”

Asked if the Department of Petroleum Resources (DPR) was helpless at checking the disparity in prices, she replied: “If you are covering a country as large, there will be issue of pricing”.

“The DPR is, however, moving aggressively in the last months to check the anomaly. Of recent, 75 filling stations have been sealed up across the country over disparity in pricing”, Alison-Madueke told the committee.

She informed the committee that the vandalisation of NNPC pipelines in Arepo, Ogun State was a major reason responsible for the recent fuel scarcity in some parts of the country and especially in the South West.

She noted that in the process of repairing the damaged pipelines, three NNPC officials were kidnapped, confirming that the three officials had been killed.

But the committee said petroleum was selling at varying prices because that the minister was allocating the product to the independent marketers with preferential treatment.

The chairman of the committee, Magnus Abe, said: “How can filling stations sell at N97 per litre when the PPMC, as we have discovered, collected money from marketers without supplying them the product on time. Honourable minister, have you ever gone to the depots to see what marketers go through. We were told that you are giving allocation to only those who have godfathers. Unless this anomaly is removed from the source, we can’t force filling stations to sell at official prices.”

The committee also asked the minister to “digitalize” the process of allocating the products to enhance transparency, saying the “current analogue process is creating hidden costs”.